The following Viewpoint is written by Arjun Mehta, vice president of project management at Philadelphia-based Ecosave
Geothermal energy currently provides approximately 1% of global electricity demand. Some long-term projections suggest that geothermal could contribute significantly—potentially double-digit, to global electricity growth by mid-century. As cities around the world pursue decarbonization while seeking protection from long-term energy spikes, investment in geothermal is expected to accelerate, with global estimates reaching up to $1 trillion by 2035. The question is no longer whether geothermal works, but whether we are ready to deploy it at the required scale.
To take advantage of this next wave of investment, engineers and developers must rethink how geothermal systems are planned, financed and owned. This means moving beyond isolated single-building projects and toward regional strategies supported by off-balance sheet financing models that align long-term system performance with long-term capital. Without this change, geothermal will remain a niche solution rather than becoming a core component of urban energy systems.
However, the biggest barrier to adoption remains the cost of capital. Geothermal systems typically require a larger upfront investment than conventional HVAC, especially in dense urban environments where subsurface analysis, drilling logistics, and permitting introduce additional complexity. These costs often overshadow the long-term benefits of geothermal, even though the underground loop infrastructure is designed to operate for 50 years or more and relies on fewer mechanical components subject to wear and tear. In practice, the challenge is primarily financial rather than technical, as initial cost structures are not aligned with lifecycle value, resilience and operational performance.
This is increasingly being addressed through service-based financing models that emphasize geothermal as a long-term utility rather than a one-time capital purchase. By shifting geothermal from a capital expenditure to a service agreement, projects can be structured to be cash flow neutral, removing upfront capital burden and balance sheet risk for developers. In “Energy as a Service” models, suppliers cover the full upfront cost of equipment and installation, maintain the system over a long-term contract, and recoup their investment through energy savings relative to conventional utility costs. As decarbonisation targets tighten and access to seed capital becomes more restricted, these models are gaining traction as they remove financial uncertainty for developers while delivering predictable long-term energy performance.
While financing innovation is critical, how we think about scale is just as important. Single-building geothermal systems are inherently limited by site constraints, capacity, and economics, especially in dense cities where space, drilling access, and subsurface conditions restrict system size. These limitations often limit heating and cooling capacity while reducing the financial efficiency of stand-alone installations. Even well-designed systems struggle to capture the full value of geothermal when limited to a single plot.
However, at the district or neighborhood scale, the benefits of geothermal are compounded as thermal energy is shared, stored and redistributed across a network of multiple buildings with similar load profiles. This balancing of seasonal and daily loads improves overall system efficiency, lowers costs per building, and increases resilience during peak demand or system outages. At this scale, geothermal goes beyond building-level mechanical upgrades and begins to function as a shared thermal infrastructure, comparable to district energy systems such as electric, steam, or water networks that serve neighborhoods rather than individual buildings.
New York City offers a clear example of what that future might look like. Driven in large part by Local Law 97, which imposes increasingly stringent emissions limits through 2030 and beyond, the city is a proving ground for the deployment of urban geothermal. Projects like 1515 Surf Avenue in Coney Island demonstrate that geothermal can be successfully designed and financed even in one of the nation’s most complex urban environments. Over the life of the contract, the project is expected to reduce energy consumption by approximately 60% compared to conventional HVAC systems, generating an estimated $7.2 million in savings and avoiding nearly 24,000 metric tons of CO₂ emissions. Dense subsurface conditions, regulatory constraints, and high construction costs have not prevented integration when engineering, sequencing, and financing align early.
Equally important, these projects illustrate how service-based financing can overcome initial capital constraints while allowing developers to meet emissions targets without incurring additional balance sheet risk. Rather than treating geothermal as a premium sustainability upgrade, it should be viewed as a long-term energy infrastructure tied to measurable performance and life-cycle value.
If geothermal is to move from 1% of the current energy mix to its projected role in future growth, the industry must act accordingly. Engineers, developers, and policymakers must prioritize regional systems, embrace off-balance sheet financing, and evaluate projects through a long-term infrastructure lens. The opportunity is substantial and the technology is increasingly validated in real urban deployments. The final step is to stop treating geothermal as a premium add-on and start building it as core urban energy infrastructure.
Arjun Mehta is the Vice President of Project Management at Ecosave, where he leads project operations and oversees the delivery of complex energy efficiency and renewable energy projects. With over 15 years of experience, he specializes in construction management, energy systems and carbon mitigation strategies that balance performance with cost. Arjun has managed projects in the US and internationally and holds a Bachelor of Science in Mechanical Engineering from the University of Technology Sydney.
